The general transcription factor, TFIID, consists of the TATA binding protein (TBP) associated with a series of TBP-associated factors (TAFs) that together participate in the assembly of the transcription preinitiation complex. One of the TAFs, has acetyl transferase (AT) activity that is necessary for transcription of MHC class I genes: inhibition of the AT activity represses transcription. To identify potential cellular factors that might regulate the AT activity of TAFI, a yeast two-hybrid library was screened with a TAFI segment (848-1279 aa) that spanned part of its AT domain and its RAP74 binding domain. The TFIID component, TAF7, was isolated and found to interact predominantly with the RAP74-binding domain. TAF7 binding to TAFI inhibits its AT activity. Importantly, addition of recombinant TAF7 to in vitro transcription assays inhibits TAFI-dependent MHC class I transcription. Thus, TAF7 is capable of regulating TAFI function by modulating its AT activity. To investigate the role in transcription of TAF7 repression of TAF1 AT activity, we have developed an in vitro preinitiation complex (PIC) assembly assay, using the MHC class I promoter as the template. In this assay, transcription from the PIC initiates at the sites observed in vivo, depends on all 4 dNTP's and is inhibited by inhibitors of transcription. Furthermore, we find that TAF7 assembles with the PIC. Currently under investigation is the mechanism by which TAF7-repression of the TAF1 AT activity is relieved, allowing transcription to proceed.